Cohesion Technologies Demonstrates Feasibility With Recombinant Collagen Technologies.

PALO ALTO, Calif.--(HealthWire)--May 12, 1999--

Licensing Obtained from the Washington Research Foundation

Cohesion Technologies (NASDAQ NM: CSON) today announced that the Company has demonstrated feasibility with its recombinant collagen technologies, having generated a thermally stable human Type I collagen and gelatin in yeast in a novel and proprietary form. The Company also has generated along with its partner Pharming BV, a founder transgenic animal with the human procollagen genes present.

In addition, the Company has licensed from the Washington Research Foundation ("WRF") of Seattle, Washington, patented enabling technology that is critical in producing materials utilizing yeast systems. The Company's license is for product applications in tissue repair and regeneration.

"We now have in place the requisite intellectual property to clear the way for Cohesion to produce recombinant collagen via a yeast system. This 'TelocollagenTM', as we've termed it, is essentially identical to human collagen and is expected to eliminate or greatly reduce the sensitivity that a small percentage of individuals experience with animal-source collagen and gelatin. The telopetides, which are usually removed in commercial processes of extracting and purifying collagen, would be retained, providing for more robust collagen fibers, which may enhance effectiveness. Our innovative process also is expected to reduce the time and cost to generate final product because there are no enzyme digestion steps," stated David Foster, chief executive officer. "We are very proud of the accomplishments of our scientists and are pleased to be licensing enabling technology from the Washington Research Foundation."

"The recombinant research program was one of the assets Cohesion Technologies received when the Company was spun-off from Collagen Corporation in August 1998. Cohesion has continued the research activities, made substantial progress in the past few months, and is looking to secure corporate partners to collaborate on final regulatory and commercial scale-up activities, in exchange for supply or usage rights in various fields. We are also open to discussing other arrangements which would provide Cohesion with materials for its medical products," added Mr. Foster.

"Our technical staff has years of experience processing, purifying and manufacturing collagen, as well as worldwide regulatory experience in gaining approvals for collagen-based medical products," said Frank DeLustro, Ph.D., Cohesion's president and chief operating officer. "The TelocollagenTM is isolated from common baker's yeast, an organism that has been previously used for production of important therapeutic proteins, such as insulin. Scale-up efforts to produce larger quantities of TelocollagenTM are on going and samples can be made available to potential corporate partners for testing and evaluation. Further, recombinant collagen has none of the potential for disease transmission associated with collagen derived from human tissues."

Cohesion is collaborating with Pharming BV of the Netherlands on recombinant collagen derived from transgenic animals. Scientists working on this project accomplished a significant technical milestone with the birth of the first founder animal, a male calf with the human procollagen genes present. The now-adult bull, named Columbus, is being bred to create a herd for production of recombinant human collagen. It is anticipated that Columbus' offspring will be able to produce human procollagen in the milk of lactating females, which then will be processed to collagen. Moreover, Cohesion and Pharming BV have been issued U.S. patents for recombinant collagen produced in the milk of transgenic animals.

The current combined worldwide annual bovine collagen and gelatin markets have been estimated by the Company at more than $300 million, and include a range of medical and industrial products from capsule coatings, sutures, hemostatic agents, vascular graft coatings, femoral access closures and soft tissue implants, among myriad applications. In addition to potentially replacing existing bovine applications, some analysts have estimated that a commercially successful human collagen could expand the market to $1.5 billion annually by addressing needs in artificial skin and wound repair, growth factor, drug and cell delivery, orthopedic and dental implants and cardiovascular devices.

Cohesion Technologies is focused on developing products for the estimated $1.3 billion worldwide surgical hemostasis and sealant markets. For more information on Cohesion Technologies, please visit the Company's Web site at www.cohesiontech.com.

Except for the historical information contained herein, the matters discussed in this press release are forward-looking statements, the accuracy of which is subject to risks and uncertainties including the timing of product introductions, the success of scaling up product production, the timing and terms of sales arrangements with other companies, receipt of regulatory approvals, clinical efficacy of and market demand for products, results of clinical studies and potential unfavorable publicity regarding Cohesion Technologies or its products, among other matters discussed in this release. Actual results are subject to risks and uncertainties, and actual events and results may differ significantly from the discussion of such matters in the forward-looking statements. Such differences may be based upon factors within the Company's control, such as strategic planning decisions by management and reallocation of internal resources, or on factors outside the Company's control, such as scientific advances by third parties, introduction of competitive products and delays by regulatory authorities. Please see the Company's filings with the Securities and Exchange Commission including, without limitation, the Company's Form 10-K and Form 10-Qs, which identify specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements.